Prime Minister Erdogan used police violence to fight the youth protests, then he softened his tone before cracking down once more. But does he truly comprehend what is currently happening in his country? His own future hangs in the balance.

The giant mosque would be the largest in Istanbul, big enough to accommodate 30,000 believers. It would be positioned on Çamlica Hill, the highest point in the city -- a striking, incomparable and everlasting structure.

The Turkish prime minister has been dreaming of this mosque for a long time. It's one of his favorite projects. It doesn't have a name yet, but it's quite possible that it will be named after Recep Tayyip Erdogan. Like his favorite sultan, Suleiman the Magnificent, Erdogan likes to describe himself as a "builder."

Until three weeks ago, no one seemed able to hold him back, not from his construction mania, not from his egocentric approach to politics and not from his conservative ideas about educating the people.

But then something happened that struck at the core of the prime minister's high-handedness: a youth uprising triggered by plans to demolish a deeply symbolic park. It led to comparisons between Istanbul in 2013 and Paris in 1968.

Suddenly the Gezi Park generation is refusing to simply comply with the government's dictates. It wants a more open society, and it no longer wishes to be patronized, neither by Islamists nor by Kemalists. Its rage is directed against both the tedious social conservatism of the ruling Justice and Development Party (AKP) and the authoritarian Turkish state and its repressive police force.

It began on May 28, when primarily young Turks demonstrated against a development plan in the heart of Istanbul, and their protests were brutally struck down by police with tear gas and water cannons. This police violence brought first hundreds, then thousands and finally hundreds of thousands of anti-government protesters into the streets. At least five people were killed and more than 5,000 injured in the nationwide unrest. Erdogan finally seemed to back down last Thursday and met with representatives of the protest movement.

But then at a rally in Ankara on Saturday, Erdogan said he had reached the boundaries of his patience. That night, his security forces used bulldozers to clear the protesters out of Gezi Park. They chased down fleeing demonstrators and beat them with clubs. They shot tear gas into cafes and hotels. Doctors were arrested for treating the wounded. On Sunday, Erdogan gave a heated speech describing the protesters as "terrorists." Then, on Monday, Deputy Prime Minister Bulent Arinc told a Turkish news channel that the government might call up the army to restore order.

A Legitimate Revolt?

There have been periodic flare-ups of leftist protests in Turkey, especially during the turbulent 1970s. But the clashes were a great deal more violent at the time. Radical groups fought each other in the streets, leading to large numbers of casualties and prompting the military to intervene. Some of these former revolutionaries are the parents of today's Gezi generation, and they support their children in their protests against Erdogan, whom they see as a despot. But are they right?

Many Turks believe that the international community has been overly impressed by Turkey's economic growth in recent years, and by hip Istanbul, with its glittering clubs and glass towers -- while, at the same time, members of the opposition and Kurds have been sent to prison in large numbers, reporters have been intimidated and artists bullied.

It is clear that the AKP has taken advantage of the boom to build a state in which it wields substantial control. The people in top positions in law enforcement and the judiciary serve at Erdogan's pleasure, and as the reporting on the youth protests demonstrated, the government also largely controls the media. Contracts for major projects are awarded almost exclusively to pro-government developers. The lucrative new development planned for the Gezi Park site is also reportedly in the hands of a holding company in which Erdogan's son-in-law is a board member.

It didn't take much more than that to unleash Turkey's May revolts, and almost everyone had a reason to take to the streets, as the composition of the protest movement shows. It is a melting pot of conservationists and leftist Muslims, football fans and young creative types, and although it is still amorphous and disorganized as movements go, its existence alone poses a challenge to the prime minister.

And Erdogan? He sees the ghosts of his old rivals, the Kemalists, at work wherever he encounters resistance. He repeatedly derided the protesters as "radical fringe groups" and "scraps," but then he blamed the unrest on the "old elite." This reveals how little Erdogan has comprehended the social changes taking place in his country. Officials with the Kemalist party, the CHP, tried to give speeches at the demonstrations but were drowned out by whistling protesters.

Lessons of Childhood

It's possible to fathom the roots of the prime minister's polarizing worldview. As the son of poor parents, Erdogan had to endure many insults. His adversaries tried to keep him down and intimidate him, and he was also thrown into prison and barred from politics.

Those adversaries were consistently members of the Kemalist class, who looked down on Erdogan, the strictly religious proletarian from Kasimpasa, a poor Istanbul neighborhood. His rise to the top echelons of politics was hard-fought. He had to learn to be aggressive and sometimes to rein himself in, but never to give up.

The clear distinction between "us" and "them" still plays a role today in Erdogan's political campaigns. "We" are the oppressed, pious, ordinary people, while "they" are the oppressors and the decadent, often from abroad, the Europeans, the markets and the "interest rate lobby."

In Erdogan's three terms, there have actually been periods in which things were going well between the prime minister and his opponents. Like Erdogan, many liberals wanted more democracy and less of a military state. But then Erdogan reverted to the old patterns of control, and it became clear that the kind of democracy he envisioned was more of a "controlled democracy." To legitimize it, he still invokes the threats posed by "them," even though many of "them" are in prison today.

Dissent in the Inner Circle

But it remains in question how many members of his party truly value his Rambo-like approach. Cracks are beginning to appear in the conservative camp.

Abdullah Gül, the seemingly mild-mannered president, has said some astonishing things behind the premier's back: that the government has understood the "message" of the street and that democracy isn't just something that exists on election day. Nevertheless, Gül has had the chance to intervene in the escalating conflict and, so far, has done nothing.

The influential Gülen movement, which is led by Islamic scholar Fethullah Gülen and partly backed by President Gül himself, expressed its criticism more clearly. Through its mouthpiece, the daily newspaper Zaman, it accused the prime minister of having done "enormous damage" to the "national psyche." And Fehmi Koru, a pro-government journalist, pondered the establishment of an independent Gülen party in case the differences between the "Fethullahçi" and Erdogan intensified.

For this reason, it could be owing to the Gülen movement that the prime minister jumped over his shadow and offered the protesters a referendum over the future of Gezi Park.

Erdogan doesn't want to spoil things with the "Fethullahçi," fearing that they could work against him and prevent the man from Kasimpasa from fulfilling his lifelong dream of becoming president next year.

Under the AKP statutes, Erdogan, after serving three terms as prime minister, can no longer run as his party's top candidate. This is precisely why he has strengthened a presidential system and introduced direct presidential elections, so that in 2014 the people will decide who becomes head of state. Erdogan wants to replace Gül.

But Gül has expressed his interest in serving another term as president. This leaves Erdogan with no option but to rewrite his own party statutes and run for prime minister a fourth time.

Erdogan has shown that he isn't about to relinquish power anytime soon. He wants to see the day when he, as the leader of his people, dedicates the Çamlica Mosque of Istanbul.

Translated from the German by Christopher Sultan

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Turkey's 'standing people' protest spreads amid Erdoğan's crackdown

Protesters turn to passive resistance after four people die in Erdoğan's brutal response to Taksim Square demonstration

Lunchtime in the waterfront district of Beşiktaş in Istanbul on Tuesday and Ismail Orhan has been standing silently under a yellow parasol in the blistering heat for more than four hours.

"We'll be here for weeks, for months," said the 25-year-old, as office workers used their lunch break to join a new wave of passive resistance to the authorities.

Instantly dubbed the "standing man" or "standing people" protest, fuelled rapidly by Twitter and other social media, the mute, peaceful, immobile gesture of resistance to a government that has used brute force to dispel three weeks of protest was launched on Monday evening in Istanbul's Taksim Square by a performance artist, Erdem Gündüz. The "stand-in" instantly spread like a virus.

Silent protesters swelled into hundreds across different parts of Istanbul, to Ankara, Izmir and Antalya. About 10 were detained by police in Istanbul after refusing to move, but were quickly released.

In front of Orhan, by a sculpture of an eagle, were two pairs of flipflops, two pairs of trainers and a pair of tiny baby's bootees – in remembrance of the four people killed during the unprecedented street unrest of the past three weeks and for the pregnant woman who lost her baby when riot police teargassed a luxury hotel on Saturday where terrified protesters and wounded were sheltering.

Tahsin, 63, a bank employee who did not want to use his full name, spent his lunch break joining the handful of protesters, who included elderly women.

"I'm supporting everything that's been going on peacefully for the last two weeks. I wouldn't think we could be arrested. That would be really far fetched," he said.

Hundreds more joined them at different locations. Some brought books to settle in for a long haul. Bottles of water were the most common accompaniment in a poignant and dignified display of rebellion against a government increasingly seen as high-handed and out of touch.

"I'm just stopping, standing, not speaking. Just drinking water," said Merve Uslu, 21, a student. "I heard about the standing man and it touched my heart so much. I don't support clashes with police but we're just resisting basically."

Elsewhere in the city early on Tuesday, however, the Turkish police swooped on dozens of hard-left activists, arresting more than 90 people in the first big clampdown since the prime minister, Recep Tayyip Erdoğan, ordered police to fire tear gas and use water cannons in their attack on Saturday evening to clear Gezi Park of thousands of demonstrators, inciting a night of violence across much of central Istanbul.

Erdoğan's confrontational response to the challenge to his 10-year rule has shocked much of Turkey and brought growing criticism internationally.

On Tuesday, the UN's human rights commissioner, Navi Pillay, called for officials and security forces using excessive force to be punished.

"It is important that the authorities recognise that the initial, extremely heavy-handed response to the protests, which resulted in many injuries, is still a major part of the problem," she said.

But the message from Erdoğan was the very opposite as he divided Turkey into friends and foes, and characterised the largely peaceful protests of recent weeks as orchestrated violence.

"Thanks to this process, we know our enemies and allies as they came out and showed their true colours," said the prime minister.

"The police have been represented as using violence. Who used violence? All of the terrorists, the anarchists, the rioters … In the face of a comprehensive and systematic movement of violence, the police displayed an unprecedented democratic stance and successfully passed the test of democracy."

In addition to Tuesday's arrests, at least 90 protesters were detained during the weekend violence. According to Turkish media reports on Tuesday, most have been released but 13 are to be brought before the courts, which human rights monitors say have been increasingly politicised under Erdoğan.

A lawyer who wished to remain anonymous said the number of arbitrary arrests was very worrying. "Many of those arrested over the course of these protests have been denied access to lawyers for hours; they were made to wait for a long time, some are still waiting," she said. "A red line has definitely been crossed with this."

The prime minister also came under strong attack from other parts of the political spectrum. Selahattin Demirtaş, a co-leader of the main Kurdish political party, the BDP, harshly criticised the government's stance.

Directing his remarks at Erdoğan, he said: "At the moment you look like a leader who tries to stay in power with the help of tanks and batons … This is a movement of the people and you are trying to pit the people against the people."

With the police still out in force on Taksim Square and municipal workers rolling out new lawns, planting rose gardens and new magnolia trees in Gezi Park, the cradle of the rebellion, there were calls for the protest to shift to other park areas across the country on Tuesday evening.

Police weariness appears to be growing, as well as sympathy for the mainly young people they have been confronting for weeks. "This is a good way of demonstrating, a very good way," one riot police officer said of the stand-in. "There is absolutely nothing wrong with peaceful protests; that should be everybody's right."

He laughed when asked if he would consider joining: "I have been standing here for two weeks already anyway."

Determined to carry on with his act of civil disobedience, Orhan said he and his fellow protesters just wanted "peace and democracy". If protesting entailed the prospect of arrest, so be it.

"Under normal circumstances it should not be a crime to just stand here peacefully. But in [Erdoğan's] Turkey, everything is possible."

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Erdoğan's fall from grace in Turkey is pure Shakespearean tragedy

Turkey's PM has become the personification of the corrupt despotism of the regime he was elected to sweep away

Fiachra Gibbons guardian.co.uk, Wednesday 19 June 2013 11.45 BST

As the protests in Turkey continue, spare a thought for the man whose personal tragedy few have the grace to acknowledge – Recep Tayyip Erdoğan. Until three weeks ago Erdoğan was destined to go down as the greatest reformer in Turkish history alongside Ataturk and Suleiman the Magnificent, despite all the bullying and the backsliding of the past three years.

Here was a man who seemed to have the power to tackle Turkey's century of conflict with the Kurds, Armenians and Greeks, and to lead it to a peaceful, prosperous, and democratic future – a model not just for Muslim countries but for other rising economic powers shaking off less than perfect pasts.

But Erdoğan's greatest achievement – greater still than a decade-long boom that bucked global depression – was his breaking of the power of the military that had shackled Turkish democracy for so long. In pre-Erdoğan Turkey, we would have had a coup by now.

Yet the power he concentrated to defeat the generals – by foul means as well as fair – and the paranoia of that battle, has undone him. In a matter of days Erdoğan has become the personification of all the corrupt despotism and violence of the old Kemalist Turkey he was elected to sweep away.

The ironic thing is that he has done this to himself. Such was his grip on power that only Erdoğan could have destroyed Erdoğan. And that is what he has done by turning an insignificant protest in a scrubby little park into a national emergency.

I met Erdoğan twice while he was mayor of Istanbul – and there was much I liked about him. No other European leader has risen from humbler beginnings – nor had so much stacked against them.

He had the warmth and emotion of his Georgian roots, and then at least, an uncommon sincerity. He had a clear vision – to make Istanbul work and right historic wrongs he believed religious Anatolian conservatives had suffered at the hands of Turkey's secular elite. Behind this was a hazy notion of rolling back time to an Ottoman nirvana of what might have been if Ataturk and the Young Turks – neither much troubled with democracy – had not existed.

What struck me then was how Erdoğan's telling of his own story unconsciously mirrored Ataturk's – and the lingering suspicion that he too believed Turks needed to be told what was good for them.

With Erdoğan's power having become so personalised, and self-censorship so rife that a press baron openly consulted him last month as to who should edit one of his papers, it was clear Erdoğan had vanquished the generals only to adopt their methods. His response to the Gezi crisis came straight from the old Kemalist coup handbook: brutality, black propaganda, conspiracy theories and lots of bad faith. Few politicians get into people's heads the way Erdoğan does. His hectoring manner and his way of tying logic in knots may play well with his supporters but it drives many more Turks mad.

Just as Erdoğan became all-powerful he also became personally vulnerable, battling cancer and grieving the loss of his mother who had shielded him from his frustrated and over-religious father – whose worst traits his son is now displaying as he tours Turkey to chastise his ungrateful children at a series of monster rallies: "Look what I have done for them! And this is how they reward me?" The "pious generations" he had talked of raising have spoken back.

Islamist hubris alone has not undone Erdoğan; it's more the mile-wide authoritarian streak he inherited from Ataturk and which runs through Turkish life, filtering down to humblest officials currying favour by second guessing and zealously enforcing their superiors' orders.

What we are witnessing here is pure Shakespearean tragedy but one that threatens to turn into a national calamity. That Erdoğan called his "people" together on Sunday in Istanbul at the place where Mehmet the Conqueror gathered his troops for the assault on the old Byzantine capital, added another layer of foreboding.

Turkey is in a dark place but Gezi may yet prove to be a turning point on the twisted path to democracy. One thing is for sure, the broad coalition that brought the AK party to power has been broken, perhaps forever.

Over the weekend I talked to a textile magnate from Kayseri, one of the many "Anatolian tigers" whose money has bankrolled Erdoğan's party. He was sending his workers on free buses to the first of Erdoğan's monster rallies but his headscarfed daughter was no longer talking to him over his support for him. "There are arguments in the house every day."

When I asked if he still backed Erdoğan's campaign to change the constitution so he could become a French or Russian-style president, his tone changed: "We cannot make this man president. Not now. Tayyip may destroy us all yet."

The Russian president, Vladimir Putin, is willing to see the removal of the Syrian leader Bashar al-Assad, but only if it leads to a balanced government and not a dangerous power vacuum of the kind that followed Saddam Hussein's removal in Iraq, British officials believe after two days of intensive talks at the G8 summit.

Putin blocked any reference in the subsequent communique to the removal of Assad, but British officials believe the talks have opened the way for a peace settlement if more can be done to organise the Syrian opposition forces politically and militarily.

Talks over the terms of the communique lasted until 3am. The Russians accepted the need for UN weapons inspectors to visit Syria to check on western claims that Assad has used chemical weapons.

But Putin flatly refused to have any reference in the communiqué to the nature of delegations that should be sent to the planned Geneva peace conference, insisting that this was a matter for both sides.

British officials insisted that in private Putin had declared no personal allegiance to Assad, but needed assurances that Syria would not turn into an ungoverned space on Russia's borders if he were removed. David Cameron in his press conference at the end of the summit made repeated calls for Assad's allies to realise that a strong army and security state would be preserved during a transition, words designed to reassure them that they would have a future after Assad.

British officials admitted that the Syrian opposition was still a work in progress. They had been unable to agree a negotiating mandate for a new peace conference.

The G8 communique made no reference to Assad, but called for peace talks to be resumed as soon as possible. Cameron said the main breakthrough was an agreement that a transitional government with executive powers was needed, together with a deal to call for an investigation into chemical weapons use. "We remain committed to achieving a political solution to the crisis based on a vision for a united, inclusive and democratic Syria," the final communique read. "We strongly endorse the decision to hold as soon as possible the Geneva conference on Syria."

Putin struck a defiant tone in public, telling the west that sending weapons to rebels could backfire one day, while he defended his own military contacts with the Syrian government.

"There are different types of supplies. We supply weapons based on legal contracts to a legal government … And if we sign these contracts [in the future], we will supply [more arms]."

In the final document, G8 leaders also called on the Syrian authorities and the opposition to commit to destroying all organisations affiliated with al-Qaida, a reflection of growing concern in the west that Islamist militants are playing a more dominant role in the rebel ranks.

Cameron, who chaired the summit, said separately after the talks that the west believed strongly that there was no place for Assad in a future Syria. "It is unthinkable that President Assad can play any part in the future of his country. He has blood on his hands. You can't imagine a Syria where this man continues to rule having done such awful things to his people."

He appealed to Assad's acolytes to abandon the president, insisting the need for the retention of a strong security force showed they would have a future role in Syria. He said the aim was "to learn the lessons of Iraq by ensuring the key institutions of the state are maintained through the transition and there is no vacuum. To those who have been loyal to Assad but who know he has to go and who want stability in their country, they should take note of this point."

In the house of Commons, John Bercow, the speaker, said it would be "undemocratic and inappropriate" if the government declined to hold a full parliamentary vote if ministers decide to arm the Syrian opposition. The speaker issued his warning after William Hague told MPs that the government would consult parliament but declined to explain the nature of the vote.

Bercow told the former Labour minister Peter Hain, who raised the matter on a point of order: "I have the sense that the government are hinting that they would not dream of executing a policy decision of the kind that is being considered without first seeking a debate in the house and a vote on a substantive motion. That would obviously be the democratic course. I think it is the democratic course on a substantive motion that the government have in mind. I am not sure that there was any other idea ever in their mind, but I feel sure that if it was in their mind, it was speedily expunged as undemocratic and inappropriate."

Russia's deputy foreign minister, Sergei Ryabkov, speaking on the sidelines, said earlier that any debate about Assad's role in the resolution of the conflict was unthinkable, adding he would not tolerate an outcome that led to Assad's capitulation. "This would be not just unacceptable for the Russian side, but we are convinced that it would be utterly wrong, harmful and would completely upset the political balance," Ryabkov said.

In a further development, the French president, François Hollande, opened the door to Iran attending a Syria peace conference, but reiterated that there was no future for Assad.

Paris had previously ruled out Iran taking part in the proposed conference, saying Tehran had no desire for peace, but a new Iranian president, Hassan Rouhani, was elected on Friday.

"There will no future for Syria with Assad. The Russians are not yet ready to say or write it, but when we speak of transition ... it's difficult to see how he (Assad) could be responsible for it," Hollande said.British officials said they did not rule out Iran attending talks, but needed to know more about the new president and what he would do about the Iranian-backed Hezbollah forces in Syria.

In the context of the war in Syria, the G8's support for convening peace talks in Geneva "as soon as possible" and a pledge of $1.5bn (£960m) in humanitarian aid are the diplomatic equivalent of motherhood and apple pie – a comforting reaffirmation of the decent and unobjectionable.

But neither will do much to end the crisis any time soon. Agreement between Vladimir Putin and Barack Obama, brokered by summit host David Cameron, may have been based on a common desire "to stop the bloodshed" but it barely papered over the cracks.

Cameron had warned that the Russian president was isolated. But when consensus is required, as it is at the G8, one country still trumps seven. Putin did sign up for a call for a "transitional government" in Damascus but he gave not an inch on the crucial question of whether Bashar al-Assad should step down, as the US, Britain and the Syrian opposition all insist he must.

So what had been billed as "a clarifying moment" clarified only that there is still no agreement among the five permanent members of the UN security council.

That's as true now as it was when the Syrian uprising – by far the bloodiest of the Arab spring – began in March 2011. The difference now is that at least 93,000 people have been killed and the entire Middle East is quaking to the terrible sights, sounds and dangers of a spreading and increasingly sectarian war.

The G8 politics of the lowest common denominator mean that diplomatic efforts to convene the Geneva negotiations will continue – though their prospects and timing are still uncertain.

Assad, making significant military gains with the support of Lebanon's Hezbollah, has pledged to send a delegation but the opposition remains divided and deeply reluctant.

In one sign of change, however, France's François Hollande said he believed that Iran's moderate president-elect, Hassan Rouhani, could be invited — a signal of goodwill towards Tehran.

Otherwise, the predictable failure in Enniskillen shows there has been little progress since the first Geneva conference in June 2012. Assad, then as now, refuses to negotiate his own departure, insisting he will still be around in 2014.

Other key elements of the Syrian tragedy got careful references. The condemnation of "any use of chemical weapons" glossed over Russia's insistence that there is no evidence of the use of sarin nerve gas by government forces – contradicting claims by the US, Britain and France. Concern about "extremism" was another, with a call on the Syrian authorities and opposition to shun any organisations affiliated with al-Qaida. No mention was made of controversial plans by Washington, London and Paris directly to arm rebel forces – even though US intentions, after a convoluted statement last week, remain unclear.

Obama sounded uncertain and defensive, telling PBS that "we're not taking sides in a religious war between Shia and Sunni" but aiming instead for a "stable, non-sectarian, representative government".

But his views on Putin's role were unmistakably blunt: "Assad, at this point – in part, because of his support from Iran and from Russia – believes that he does not have to engage in a political transition, believes that he can continue to simply violently suppress over half of the population," the president said. "And as long as he's got that mindset, it's going to be very difficult to resolve the situation there."

Aid agencies will be pleased with the promised $1.5bn in humanitarian aid – split between Syria and neighbouring countries, which are struggling to cope with 1.6 million refugees and rising. That's a substantial sticking plaster. But the wound is still bleeding heavily and shows no sign of being staunched.

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Syria and the G8: lost in translation

Mr Putin's sympathy is with the despots, not their people. It should therefore come as no surprise that the G8 leaders had difficulty arriving at even the blandest of statements on Syria

Editorial The Guardian, Tuesday 18 June 2013 22.33 BST

Shortly after the Boston bombings Barack Obama got a message of support and sympathy from Vladimir Putin. The curiosity of it was that the Russian original was phrased in almost exactly the same words as the message Mr Putin sent to George W Bush after 9/11. Whole sections were lifted straight out of the first message. And this one was intended to be read by a different president in radically different times. Except that in the Russian leader's mind, they are not. Whether it is in Chechnya or Boston, or indeed in Woolwich, the common enemies that the civilised world is facing, in Mr Putin's view, are jihadis, and Sunni Islamist ones at that. With the confidence of an operative from the Russian security establishment who knows about such things, Mr Putin said at the end of the G8 meeting that there were loads of criminals fighting for the Syrian opposition who could commit brutal murders against British soldiers.

Maybe there are, but this is a view that precludes the legitimacy of popular uprisings against tyrannies, least of all in the Arab world; thinks the Tunisian and Egyptian revolutions were CIA plots; and takes all threats of regime change personally. Mr Putin's sympathy is with the despots, not their people. It should therefore come as no surprise that the G8 leaders had difficulty arriving at even the blandest of statements on Syria, which – the world can safely assume – will be lost all too quickly in translation. Some will say that the communique contains a hint that the rebels' backers differentiate between the Assad clan and the military and security services of the Syrian state. But equally well that statement could be parsed in Damascus and Moscow as one that blocks Assad's removal.

The conference also leaves large lacunas in the British, French and US positions, all rhetorically in favour of an early peace conference in Geneva – even if the military help they are providing on the ground points to an older pre-civil-war agenda. Even if he wanted to, David Cameron could not assemble an agreed list of Syrian opposition leaders to sit down in talks about a transitional authority, because – even after 25 months, and 93,000 deaths – many of them are at daggers drawn and spend their time denouncing each other.

There remain substantial differences of opinion inside Washington, and between Washington and London and Paris, about what arms to give the rebels. Mr Obama has reluctantly, and in our view wrongly, come to the view that overtly arming the rebels is the least worst option, whereas Mr Cameron and François Hollande have been enthusiastic interveners all along. It is hard to say what signal the end of the EU arms embargo sends to Assad, other than to ask the Russians and the Iranians to match that supply of weapons – which they are only too willing to do, and capable of doing. All this points to a continuation and deepening of the conflict just as it has become internationalised and sectarianised by the involvement of Hezbollah. If there is to be a peace conference in the future, the communique is really saying it will only be decided by lines drawn by armies on the ground. That points to a permanently divided country.

Before Syria, Mr Cameron's three stated aims for the summit could be boiled down to tax, trade and transparency. On each, the talk was better than the action. A giant round of negotiations between the US and Europe is now under way – but it did not need this week's summit as a kickstarter. The same goes for the prime minister's deal on openness with British tax havens. A new direction of travel has been set on tax avoidance at Fermanagh, that much is clear. But a bold and firmly worded agreement? Sadly, no.

A breakthrough did come on Tuesday, but it had nothing to do with talks in Fermanagh. It was that Washington had agreed to drop a series of preconditions that previously held back negotiations over the future of Afghanistan and that talks with the Taliban were back on again. The omens now are that same might have to happen for Syria.

Barack Obama and his family arrived on Tuesday night for the US president's first visit to the German capital since assuming office. Air Force One has landed, and the American leader will stay for 25 hours.

Air Force One landed in Berlin at 8:20 p.m. CET on Tuesday evening, marking the start of an official working visit by United States President Barack Obama in the German capital. After their arrival, Obama, who is here together with his wife, First Lady Michelle Obama, and their daughters, Malia and Sasha, traveled by motorcade to the Ritz-Carlton Hotel at Potsdamer Platz, where the family will be staying. Helicopters could be heard flying above the city following the family's arrival.

German Foreign Minister Guido Westerwelle and US Ambassader to Germany Philip Murphy welcomed the family on the red carpet after they descended the stairs from their Boeing 747. The Obamas, who traveled to Berlin directly from the G-8 summit in Enniskillen, Northern Ireland, have no official program scheduled for Tuesday night.

During his brief stay in the German capital, which will last barely 25 hours, President Obama is expected to meet with German Chancellor Angela Merkel, President Joachim Gauck and Peer Steinbrück, the leading candidate for the center-left Social Democratic Party in national elections scheduled for September. He is also slated to give a speech to 4,000 invited guests at the Brandenburg Gate at 3 p.m. on Wednesday (The speech will be streamed live on SPIEGEL ONLINE.)

During her stay, First Lady Michelle Obama is also expected to visit Berlin's Memorial to the Murdered Jews of Europe as well as the Berlin Wall Memorial, which is home to one of the few remaining original stretches of the wall that once divided East from West Berlin during the Cold War.

In Berlin, a number of political issues are likely to be addressed with the president, including planned negotiations for a trans-Atlantic trade pact, the Syrian civil war as well as criticism of the US' massive Prism program of Internet monitoring, which has featured heavily in the German news since the revelations became public earlier this month.

SPIEGEL ONLINE International will have full coverage of President Obama's visit on Wednesday.

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SPIEGEL ONLINE06/19/2013 10:01 AM

Berlin Speech: Obama to Make Plea for Nuclear Disarmament

Speculation has been rife in Berlin regarding the possible contents of US President Barack Obama's speech in front of the Brandenburg Gate on Wednesday. Media reports indicate he will be making a renewed push for nuclear disarmament.

There are some tough acts to follow when it comes to giving speeches in Berlin. John F. Kennedy's legendary "Ich bin ein Berliner" speech, delivered half a century ago, still remains without equal. But Ronald Reagan's 1987 address in front of the Berlin Wall and the Brandenburg Gate, in which he invited Soviet leader Mikhail Gorbachev to "tear down this wall," has likewise been treated kindly by the history books.

That US President Barack Obama will attempt to follow in their footsteps on Wednesday during his state visit to Berlin seems a fool's errand. But according to the New York Times, Obama hopes to deliver a powerful message of his own -- and plans to make a major push for further nuclear disarmament.

Citing unnamed administration officials, the paper writes that Obama intends to call for further reductions to America's nuclear arsenal, provided that Russia is prepared to do the same. The news agency AFP, citing a US government representative in Berlin, confirms the report.

The speech had been kept highly secret ahead of Obama's day of activities in the German capital on Wednesday. The Times reports that the president will propose reducing the number of strategic weapons the two countries possess by a third. In addition, he will promise to work toward a reduction in tactical nuclear weapons, as well.

Plenty of Other Issues

The move would resume an effort to limit nuclear weapons that Obama has pursued off-and-on through much of his five years in office, beginning with a speech he delivered in Prague in April 2009. Two years ago, he signed a treaty with Russia that would require both countries to cut their stockpiles of strategic nuclear weapons to below 1,550. According to the New York Times, the proposal he will make on Wednesday would result in a reduction far beyond that, leaving each side with some 1,000 weapons.

Prior to delivering his speech, however, Obama will no doubt be forced to address several other pressing issues. Having arrived in Berlin on Tuesday night following the G-8 summit in Northern Ireland, Obama will meet with both German President Joachim Gauck and Chancellor Angela Merkel on Wednesday before delivering his speech. Merkel has already noted that she will question the president on recent revelations that the National Security Agency has been systematically monitoring Internet traffic. In addition, pending talks on a far-reaching trans-Atlantic trade agreement are certain to be a focus.

Following his speech in front of the Brandenburg Gate before 4,000 invited guests, Obama will meet with Peer Steinbrück, the Social Democratic challenger to Merkel in national elections this September. Afterwards, he will join Merkel and guests for a dinner at Schloss Charlottenburg, a palace in western Berlin, before getting back on Air Force One for the trip back to the US at 9:30 p.m local time.

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Barack Obama follows in footsteps of JFK with speech in Berlin

Kennedy still has hold on city where he declared 'Ich bin ein Berliner', meaning US president has tough act to follow

It is one of the most endearing gaffes made by a world leader speaking a foreign language. "Ich bin ein Berliner," John F Kennedy intoned in a seminal speech in June 1963, apparently unaware of double entendre: some took it to mean he was declaring himself a citizen of the capital; to others it sounded as if he had announced himself to be a jam doughnut.

Now, almost 50 years since that memorable intervention in support of the marooned millions of west Berlin, Barack Obama treads in his footsteps: an American president, a Europe divided, a keynote speech, only on this occasion, probably no reference to mid-morning pastries.

On Wednesday the US president is scheduled to speak before 4,000 people at the Brandenburg Gate. Eight thousand police will be on duty for the visit, drafted in from across Germany. Michelle Obama and their two daughters will undertake a separate tour of cold war sites such as Checkpoint Charlie and the Berlin Wall memorial at Bernauer Straße.

"JFK's legacy is very much alive, at least here in west Berlin, where older people have fond memories of the American presence in the city," said Nino Kipp, a student studying political science at the Free University of Berlin.

The speech Kennedy wrote before his visit was intended to be modest and calm in an attempt to avoid any conflict with the Russians and East German authorities. But during his visit, he became emotional and rewrote the speech to make it more aggressive, said Alina Heinze, director of the Kennedys museum in Berlin.

What Kennedy found in Berlin were people traumatised by the separation of the city and on the frontlines of a cold war threatening to erupt between the Soviet states and the western world. "He gave the people a ray of hope," said Heinze. "He said something important about being free and that the people of Berlin were free citizens. He gave them the confidence."

Obama on the other hand faces a more confident Germany and a more diffident people uncertain about American motives. His stance on drones, unfulfilled promises over Guantánamo and the National Security Agency scandal, which revealed US authorities to be monitoring the internet data of Europeans, have made Germans more sceptical. "[He said] nice words, but when you look at his deeds – some people are very disappointed," said Josef Braml, an expert in transatlantic relations at the Berlin-based thinktank the German Council on Foreign Relations.

He said there were likely to be more problems ahead for the relationship. "There is now a competition between the dollar and the euro – we will be competing for export markets in Asia," added Braml.

Obama's speechwriters will seek to avoid any unwelcome double entendres, though many Germans say the JFK gaffe was overblown. "In Berlin nobody says Berliner for jelly doughnut. We call it a pfannkuchen," Heinze said, adding that those watching would not have noticed the double meaning. "I'm not sure where the myth came from, but usually people from the US ask us about it."

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SPIEGEL ONLINE06/18/2013 06:12 PM

Obama in Berlin: Tearing Down Trade Walls with the US President

By Gregor Peter Schmitz and Severin Weiland

The shine has come off Obama's image since he was last in Berlin in 2008. This week's visit is set to be overshadowed by the NSA surveillance scandal, which Chancellor Merkel says she fully intends to address. Free trade will likely top the agenda.

The weather is perfect. After a spring full of rain, Barack Obama and his family will be able to enjoy a balmy summer evening in Berlin. And the city is looking its best too. Even the trunks of the trees out in front of the US Embassy got a new coat of paint last week.

Other preparations have been made too, of course. Barriers have been erected, streets have been closed, police are in position and helicopters are ready to begin buzzing overhead. Anticipation ahead of the US president's visit is in the air, even if he will only be staying 25 hours.

But the Obama who's visiting the German capital this week isn't the same man who received a rapturous reception five years ago, when he gave a speech at the Victory Column during his presidential election campaign in 2008.

The mood these days is far more sober. Obama, it turns out, is not going to revolutionize national security policy. He is the leader of a superpower, one who pursues his country's own interests first and foremost.

His brief visit will be overshadowed by news about the National Security Agency's surveillance of worldwide Internet communications. But Obama is touching down in Germany in the run-up to the general election, and in Berlin, not only the opposition but also Chancellor Angela Merkel's junior coalition partners, the Free Democrats, are demanding answers.

His visit is therefore an acid test for US-German ties. It's a chance to revive a flagging relationship and express mutual appreciation. But it's also a chance to ask some searching questions.

While Merkel will certainly bring up the subject of online surveillance and will request transparency, the Chancellery does not want the controversy to spoil the visit. For Merkel, it's a public relations opportunity ahead of the election in September and should not be dominated by disagreements and differences. After all, it's not every day that a US president comes to Berlin.

The Real Message

Furthermore, German-American relations are fundamentally sound. There may be tension, but not enough to cause concern. Even if many Germans are disappointed by what they see as Obama's broken promises during his time in the White House, he remains a president they trust. Some 60 percent of the country is satisfied with his leadership, according to surveys. He has the support of women in particular.

The benefits are not solely to be reaped by Merkel. US presidents appreciate the powerful public relations punch that Berlin affords them. For many Americans, the Brandenburg Gate, where Obama will speak on Wednesday, remains a symbol of freedom and the fall of the Berlin Wall in 1989. The speech will be the highlight of his visit, yet this time he will not be cheered on by 200,000 onlookers as he was five years ago. Only 4,000 invited guests are allowed to attend, amid a massive security detail.

Merkel and Obama will be arriving fresh off the G-8 summit in Northern Ireland and issues on their list of talking points are likely to include the Middle East, Afghanistan, Iran and the civil war in Syria.

Obama is also expected to reiterate his basic commitment to the planned Transatlantic Trade and Investment Partnership (TTIP) with the EU. The TTIP is set to be a key project in years to come and many hopes are riding on it, especially in Berlin. It might even feature in Obama's speech on Pariser Platz.

It would at the very least be a signal, this vision of a free trade area from Los Angeles to Warsaw. Obama had some initial doubts about its feasibility, publically mentioning the project for the first time in his State of the Union Address in February and then only after comments on the planned Trans-Pacific Free Trade Agreement (Trans-Pacific FTA).

But by nominating as the US Trade Representative Michael Froman, a fervent supporter of the TTIP, Obama has made his intentions clear.

If the project is to succeed, however, Obama needs to keep publically demonstrating his commitment, says one White House expert. For now, its actual implementation is still a long way off. On both sides of the Atlantic, it continues to draw criticism and spark fears.

High Hopes For Merkel

Some in Europe are doing their part to raise doubts about the project in the US. The French, for example, are insisting that an exception be made for their film industry. "Paris has recently been practically autistic on economic issues, and its blockade could have a ripple effect," says Jack Janes of the American Institute for Contemporary German Studies. London could conceivably soon call for special provisions as a financial center; German farmers might ask to block genetically modified corn from America.

Who could prevent such a tug of war? The hope in Washington is that this would fall to Merkel and Germany, the new economic heavyweight in Europe. For instance, Berlin could emphasize that as a reaction to the euro crisis, it wants not only to save money but also to boost economic growth, believes Bruce Stokes from the Pew Research Center in Washington. After all, economists expect that the TTIP agreement will cause a growth spurt on both sides of the Atlantic.

Berlin might be the right place to give such a signal. The current trade barriers are akin to walls. Nearly every president who has visited the city has made a reference to its former division: John F. Kennedy 50 years ago with his "Ich bin ein Berliner" speech, Ronald Reagan with his "Mr. Gorbachev, tear down this wall" appeal and Bill Clinton by saying "Berlin is free … all things are possible." Obama himself didn't let his appearance five years ago pass by without a historical reference to the city -- he recalled the Berlin Airlift of 1948-49, when the Allies flew in supplies to break the Soviet blockade of West Berlin.

So what will it be this time? "He won't let the people of Berlin down. There is hardly a better speaker in the history of our presidents," said outgoing US Ambassador to Germany Philip D. Murphy in a recent interview with SPIEGEL ONLINE.

Yulia Tymoshenko, the former Orange Revolution co-leader jailed for abuse of office, could be released from prison this autumn and allowed to travel to Germany for medical treatment under a deal being thrashed out between the Ukrainian authorities and European intermediaries.

The EU has made the solution of the dispute a condition of closer ties with the former Soviet republic.

Tymoshenko is serving a seven-year term for abuse of power concerning energy deals with Russia. She has been in hospital since May 2012 suffering from a spinal hernia. Doctors from the Berlin-based Charite clinic have been involved in her treatment.

Renat Kuzmin, Ukraine's first deputy prosecutor general, said Tymoshenko could be sent to Germany for treatment. "Such a possibility is not prohibited by law," Kuzmin said. "If certain political and legal decisions are taken, it's possible."

Kuzmin refused to specify the terms under which she could stay in Germany.

European officials have been pushing for a solution, with the affair severely testing ties between Brussels and Kiev.

"There are some plans, certain proposals have been made. Now we are waiting for a response, and we'll see," Alexander Kwasniewski, the European parliament's envoy and a former Polish president, told Polish Radio.

Tymoshenko shot to prominence during the Orange Revolution, the Ukrainian people's uprising against fraudulent elections which ultimately prevented Viktor Yanukovych from assuming the presidency in 2004. Yanukovych defeated Tymoshenko in 2010. Criminal cases against her were opened later that year.

Tymoshenko was jailed in 2011. The case was widely seen as an attempt by Yanukovych to keep his rival out of the 2015 presidential elections.

Insiders claim Tymoshenko has been reluctant to leave Ukraine for treatment because she does not want to desert her power base. They now say she may be about to change her mind.

Tymoshenko's daughter, Eugenia, said she liked the idea of sending her mother for treatment abroad, although she did not know her exact thoughts.

"This decision depends not on us, it depends only on one person – Yanukovych," she said. "But if this decision is made, it doesn't make sense for her to refuse this, because she definitely needs this treatment. This is what I think as a daughter."

Earlier this month, Tymoshenko's health reportedly deteriorated further – doctors have said she needs invasive therapy and probably an operation.

"The Ukrainian doctors take care of her, but they stay under constant pressure and they always have to follow the instructions coming from above," Eugenia Tymoshenko said.

Volodymyr Fesenko, head of the Penta thinktank, said: "It looks like there are preliminary agreements between Tymoshenko and those in power. Now the technical talks are going on."

Fesenko said the chances of a move remained high despite opposition within Yanukovych's inner circle. "I think all will be finally decided at the last moment – sometime in August-September."

Tymoshenko is facing separate charges of fraud and tax evasion. She was also charged in January with allegedly financing the 1996 gangland-style murder of the Ukrainian MP Yevhen Shcherban, for which, if convicted, she could get a life sentence.

"We have enough proof of Tymoshenko's involvement in this crime," Kuzmin said. "It will go to the court, when Tymoshenko at last gets better and the doctors allow her to participate in the investigative actions."

Tymoshenko has branded as absurd any links between her and Shcherban's murder. "When Yanukovych ordered to start political persecutions against me I was joking that soon they will accuse me of murder. Now my joke has become a reality," she wrote in a letter from jail.

Tymoshenko's business career took off in the chaotic 1990s after the collapse of the Soviet Union, earning her the nickname "gas princess" after she became a supremely wealthy energy oligarch.

Ukraine is looking to press further charges against Tymoshenko, dispelling any hopes of a presidential pardon.

Fearing the U.S., Wikileak’s Assange will stay in Ecuador’s London embassy

By ReutersWednesday, June 19, 2013 4:07 EDT

By Andrew Osborn

LONDON (Reuters) – WikiLeaks founder Julian Assange says he will not leave the sanctuary of the Ecuadorean Embassy in London even if Sweden stops pursuing sexual assault claims against him because he fears arrest on the order of the United States.

In an interview with Reuters and others to mark the first anniversary of taking refuge in the cramped diplomatic building, Assange said he remained hopeful he might be able to leave but offered little evidence to suggest he would be finding new living quarters anytime soon.

“I wouldn’t say I wouldn’t leave,” he said. “(But) my lawyers have advised me I shouldn’t leave the embassy because of the risk of arrest in relation to the risk of arrest and extradition to the United States.”

When asked whether he would remain inside even if Sweden dropped the investigation against him, Assange said: “That’s correct.”

Assange chose his words carefully in the interview, which was conducted last Friday under embargo. In a wide-ranging discussion behind drawn white net curtains, Assange hailed Edward Snowden, a former contractor for the U.S. National Security Agency who made revelations about U.S. surveillance programs, as a hero.

He also railed against the United States, Britain and his native Australia and talked about his case with semi-legal expertise.

Assange, 41, fled to the Ecuadorean Embassy last June to avoid extradition to Sweden, which wants to question him about allegations of sexual assault and rape, which he denies.

He says he does not want to answer the allegations in person because he believes Sweden would hand him over to the U.S. authorities, who would try him for helping facilitate one of the largest information leaks in U.S. history.

WikiLeaks began releasing thousands of confidential U.S. documents on the Internet in 2010, embarrassing the United States and, according to some critics, putting its national security and people’s lives at risk.

The court-martial of Bradley Manning, the U.S. soldier accused of providing reams of classified documents to WikiLeaks, is under way in Maryland.

Ecuador has granted Assange political asylum, but Britain has made it clear he will be arrested if he tries to leave the building, which is heavily guarded by police.

As Assange spoke, at least four policemen ringed the embassy.

WEIGHING RISKS

Assange said he initially thought he might be holed up in the embassy, a diplomatic facility in one of London’s swishiest areas, for up to two years. His original timetable was still a fair estimate, he told his interviewers.

When asked whether he was worried the situation could drag on much longer, he conceded it was a possibility.

“Left to its own devices that is a risk, left to fate that is a risk,” he said. “There have been other cases, similar deadlocks for political refugees in embassies, that have gone on for dozens of years. However, we don’t intend to leave the situation to fate.”

Assange, who looked pale, complained of a lack of sunlight, saying there was a risk people in his circumstances could develop rickets.

He said he worked 17-hour days, exercised to try to keep healthy and currently was working on a song about “the new politics that has come about as a result of the Internet and media distortion” with a popular Latin American musical group.

Assange said he never used email but had others read it for him instead.

Casually dressed in jeans, an open-necked blue shirt and athletic shoes, Assange nursed a cup of tea as he spoke, becoming animated when it was suggested he had time on his hands to think about his fate.

“Where do people get this crazy idea I have time on my hands just because I’m stuck,” he said. “It takes more time to do things if you’re in an embassy, not less.”

He spoke enthusiastically about his political ambitions in Australia, whose government he said was “perverted,” and of the popularity of the WikiLeaks political party there.

But it was his own case and legal predicament that Assange circled back to time and time again.

It had become a “matter of prestige” for the governments concerned, he said, and had developed into a geopolitical standoff that he believed was politically motivated.

“It remains the case that it is highly unlikely that Sweden or the United Kingdom will ever publicly say no to the United States in this matter,” he told his interviewers.

But he said he still held out some hope.

“Like most matters of international prestige, solutions are found which appear to be technical or enforced by a third party such as an international court,” Assange said. “I expect that will happen in this matter also.”

His own lawyers and the Ecuadorean government had concluded a legal challenge could be mounted against Britain in the International Court of Justice over his case, he said, but he had decided not to do so for now because it “could take years”.

Talks between Britain and Ecuador on Monday about Assange’s fate ended with no breakthrough, though both countries agreed to establish a working group to try to resolve the standoff.

The EU and the US are set to start negotiations on a trans-Atlantic free trade agreement in July. A deal could have huge benefits for Germany and the rest of the EU. But there would also be losers according to a new study.

If the United States and the European Union are able to come together on a far-reaching free trade agreement, Germany would be one of the greatest beneficiaries. Fully 181,000 new jobs could be expected and per-capita income would spike by 4.68 percent. That is the result of a study released this week by the Bertelsmann Foundation together with the Munich-based Center for Economic Studies.

The report found that all members of the planned free trade area would benefit from the deal, with the US emerging as the biggest winner. But European Union member states stand to make large gains as well.

The report comes as the EU and the US agreed on Monday to begin talks on the sweeping new deal next month. European Commission President José Manuel Barroso said on Monday on the sidelines of the G-8 in Northern Ireland that talks were starting and that it would offer "huge economic benefits" on both sides of the Atlantic. US President Barack Obama said that reaching agreement on a deal is "a priority of mine" and that he is "confident we can get it done."

According to the study, the Trans-Atlantic Trade and Investment Partnership (TTIP) would provide the greatest benefits to the US and to Great Britain. Gross domestic product per capita would rise by 13.4 percent in the US and by 9.7 percent in the UK. More than a million new jobs would result in America. That number would be 400,000 in Britain.

Rest of World Would Suffer

But the benefits would be felt across Europe, the study found, with average economic growth of 5 percent. The complete study can be read online here.

Still, the study makes it clear that the rest of the world would likely suffer as a result of a trans-Atlantic free trade agreement, including job losses and slower economic growth. Yet the overall effect of a deal, which would create the biggest free trade area in the world, would be a positive one, with global per-capita GDP rising by 3.3 percent as a result and the creation of an additional 2 million jobs. Both numbers take into account the inevitable losses that some countries will experience.

In theory, the study authors write, the TTIP could benefit even more countries were they to take on some of the regulations that may be included in the free-trade deal. Indeed, a far-reaching deal might encourage developing and emerging countries to reach a compromise on the Doha trade talks, which are currently in stasis.

For the study, researchers simulated the possible effects of the TTIP on 126 countries. The model they used allows them to see how the 2010 global economy would have looked had a free-trade agreement already been in place. They worked through two possible scenarios. The first assumed merely the disappearance of tariffs that are currently in place between the US and the EU. The second scenario envisions a much broader deal including the elimination of all barriers to trade, including varying quality and legal standards, different packaging guidelines and licensing procedures.

Doubling Exports

Under the first scenario, the TTIP would have a relatively small effect on the German economy: instead of the 4.7 percent growth resulting from a full deal, the mere elimination of tariffs would boost the economy by just 0.24 percent. Levies between the US and the EU are already at a very low level.

In addition to economic growth, however, trans-Atlantic trade between the EU and the US would grow rapidly. Germany would see exports to and imports from the US almost double, and American trade with crisis-stricken euro-zone countries like Greece, Italy and Portugal would increase by more than 90 percent.

Still, the news is not all good for Germany. Trade with its European Union partners would suffer because the advantages currently in place would disappear. Trade with France, for example, would drop by 23 percent according to the study and by 40 percent with Britain. Trade with Italy, Greece and other EU member states suffering from the euro crisis would drop by around 30 percent. Such drops would be more than compensated for by increased trade with the US.

Germany would also see a 10 percent drop in trade with developing countries such as China, Brazil, India, Russia and South Africa. For the US, the drop would be fully 30 percent.

Limited Benefit for France

The study makes clear that there would be plenty of losers, particularly neighboring countries that are left out of the deal. Countries in North Africa and parts of Eastern Europe would see trade with the EU drop by some 5 percent. Mexico and Canada, for their part, would see per-capita GDP plunge by 9.5 percent.

Study authors point out, however, that benefits for the EU and the US would be such that they could afford to compensate those who lost out so that all would benefit. At the same time, some countries would be able to minimize their losses by eliminating some trade barriers currently in place -- essentially adopting some elements of the TTIP.

Within Europe, Sweden, Ireland and Spain would join Great Britain as the biggest beneficiaries of TTIP. France, on the other hand, would see its economy grow by just 2.6 percent due to its relatively low level of trade with the US.

An investigation by the United States Securities and Exchange Commission has revealed for the first time the methods with which the Swiss investment bank UBS sought to palm off bad debt securities on German municipalities. It succeeded in Leipzig.

The American banker couldn't even pronounce the name of his German client when he appeared for the interview on the morning of Sept. 20, 2012: Kommunale Wasserwerke Leipzig, quite a tongue twister for a Wall Street man. But it wouldn't make much difference, he reasoned, because hardly anyone in America was likely to have heard of it before.

By the afternoon of the next day, after undergoing 12 hours of questioning by the American financial regulatory agency, the Securities and Exchange Commission (SEC), John Simon* knew he was mistaken. SEC enforcement division lawyer Andrew H. Feller was in fact very well informed, after having read through emails and call logs, and he knew whom Simon had met in New York, London and South Africa. The SEC attorney could even pronounce the name of the city of Leipzig's water utility relatively well.

Feller had spent two years investigating the methods Simon had used to develop risky deals involving water treatment plants in the eastern German state of Saxony for UBS, a major Swiss bank. In the end, Leipzig faced potential losses of €300 million ($400 million), joining the ranks of many German municipalities that had lost vast sums of money in complex Wall Street deals.

There had already been a number of court cases to examine the ways in which local politicians in Germany had been led astray in global financial markets. The SEC investigation now outlined a more comprehensive picture and shed light on the dubious role played by the banks. When the SEC in Washington concludes its investigation, known by its file No. 11728, it will likely lead to a reassessment of the actions of German cities before and during the financial crisis.

Were City Managers Duped?

Until now, it was widely felt that local politicians and the managers of their municipal operations often had only themselves to blame. With a mixture of naïveté and greed, they had bought financial products of which they understood neither the names nor the risks they were taking by making those investments.

It is now emerging that international bankers developed aggressive strategies to dispose of toxic securities by selling them to German municipalities. It appears the banks deliberately targeted inexperienced provincial managers and sold them bad deals from which only the banks could profit.

Internal bank documents and court records show that shortly before the financial crisis began, UBS apparently sold securities to the city of Leipzig for which the risks were almost impossible to calculate, earning a sizeable profit in the process. "The supposed transaction only served the purposes of banks and criminal racketeers and is null and void, as far as we are concerned," says current Leipzig Mayor Burkhard Jung, a member of the center-left Social Democratic Party (SPD).

It was too late by the time city managers realized that in order to insure their sewage treatment plants, they were to be liable for the mortgage-backed securities of American banks.

Much is at stake. If the SEC can prove that the bankers acted fraudulently, other investment banks could also face consequences resulting from past deals. In Berlin, J.P. Morgan is claiming €155 million from a similar deal with the city's public transport authority. In the case of the Leipzig water utility, UBS will likely be slapped with substantial fines. Leipzig, on the other hand, will probably not be ordered to pay the €300 million the Swiss bank has sought to recover in a lawsuit filed against the city.

A City Discovers Turbo-Capitalism

The story began in the late 1990s, when local politicians and the managers of municipal operations discovered turbo-capitalism, along with its seemingly endless possibilities for increasing wealth. Cross-border leasing was the magic word.

In the transactions, cities sold their infrastructure to US financial investors, who then leased the facilities back to the municipal governments. It was purely an accounting transaction that promised to benefit everyone involved, or at least it seemed that way. The investors benefited by reducing their US tax liability, and they passed on a portion of these savings to the municipalities in the form of "cash value benefits."

Leipzig was a particularly avid participant in the game. First city officials sold off the convention center, followed by the city's streetcars. Sewage networks and sewage treatment plants were also targeted for sale to American investors.

Moving More than Water

Klaus Heininger was especially fascinated by this business model. The head of Kommunale Wasserwerke Leipzig (KWL) had moved to Leipzig from Bavaria. Self-confident, risk-taking managers like Heininger were in great demand there at the time. But soon Heininger realized that the classic business of managing the city's water supply was no longer sufficiently attractive. "We move more than water," was his motto.

Starting in 2000, he began moving hundreds of millions of euros back and forth. Banks, trusts and offshore companies around the world became involved in the business of selling and leasing back Leipzig's sewage networks and wastewater treatment plants. The deal went through and initially provided Leipzig with €22 million in revenues.

Meanwhile in New York, financial managers were developing new ideas to keep the lucrative business with European municipalities going. Simon was one of the hundreds of determined men and women rushing around Wall Street with oversized cardboard cups of coffee in their hands. It was before the crash, when everything seemed possible and even the most absurd-seeming financial products promised to develop into enormous deals. A former business partner referred to Simon as "a cool guy who can sniff out a good deal right away," someone who meant $30 million when he said 30 bucks.

Simon had gone to law school in the early 1990s. Later, working for the investment bank Credit Suisse First Boston, he set up cross-border leasing arrangements with European cities for US investors. He moved to UBS in 2002, where he also worked with municipalities.

But the golden days of cross-border leasing were over. The US government had closed the tax loophole in 2004, thereby obstructing new deals with European cities.

A Bank Unloads Its Risks

Simon and his department developed a new business model, code-named "Matilda." The investment bankers set their sights on existing deals with European customers in order to sell them new financial products: special credit derivatives to supposedly hedge the old lease agreements.

For UBS, this type of transaction had several benefits. For one thing, it provided the bank with substantial commissions and fees. Besides, it enabled UBS to use the products to unload its own risks onto the municipalities.

All Simon needed now were customers onto whom he could palm off a high-risk product that was in fact more of a time bomb than an insurance policy. The UBS manager knew who could help him: two German investment bankers with whom he had set up cross-border leasing arrangements at Credit Suisse First Boston in the past. They had since established a small, discreet company in Switzerland called Value Partners.

On April 10, 2006, Simon wrote his first email about the Matilda project to Value Partners. He wrote that UBS wanted to offer special credit derivatives known as Collateralized Debt Obligations (CDO) within the context of cross-border leasing. The CDOs could serve as an insurance policy if there were problems with the municipal facilities that had been sold and leased back.

The best part of it was that the offer would initially cost the customers nothing and in fact provide them with profits -- as long as they hedged the bank's risks in return.

It didn't take the two Germans long to identify a potential client. In an April 19 email, they wrote to KWL's Heininger, with whom they were familiar from earlier leasing deals. There were ways to "optimize" the existing lease agreements, they explained.

Internal UBS Fears of 'Risk to Our Reputation'Soon afterwards, Value Partners was able to report positive signals from Leipzig: "Our client is very much money minded -- so please make sure your colleagues are pricing very competitive and fast," one of the emails to Simon reads. Apparently Simon complied, informing his UBS colleagues that if a deal were reached, the client stood to make between "$22 and 28 million" and that "there will likely be a similar fees for the firm." By firm he meant UBS.

Things happened very quickly after that. In early May 2006, Heininger attended a meeting at the UBS branch in London, the center of European investment banking. Simon had flown in from New York for the meeting.

A Witch's Cauldron at UBS

Paul Valota* of the Exotic Desk, as the bank's internal witch's cauldron was known, handled the presentation. Although Valota and his UBS colleagues reportedly mentioned risks, they did so with a highly placating tone, as Heininger recalls today. "The world would end before risks are realized here," the bankers reportedly said.

But things didn't go quite as smoothly as that. KWL's attorneys, for example, reportedly voiced their concerns about the deal. They argued the financial risks were too great, and in doing so they struck a nerve. The UBS bankers disagreed. The financial products were structured in such a way -- for good reason, from their point of view -- that "UBS" would "benefit the most if the customer suffers losses," Valota wrote to his colleagues.

There was also growing resistance within the bank. The UBS loan auditing division allegedly submitted its veto, saying that it doubted whether the German clients were capable of properly assessing the risks, and feared a "risk to our reputation in the event of losses."

To exert pressure within the bank, Simon allegedly brought in his superiors. The banker responsible for risk products, Simon is said to have told his team soon afterwards, had gotten involved "to 'force' Internal Credit to revise its initial decision and approve the deal."

Bank Auditors Unconvinced

German UBS managers also campaigned for the deal. "Based on everything we know, this is a suitable transaction," a Frankfurt banker in charge of municipal deals wrote in an email to London. But the Frankfurt team couldn't have gathered much information by that point. Its response was received at 12:58 p.m. on June 7, all of three minutes after the inquiry from London had been sent.

But the bank's auditors still weren't convinced, so Simon and his colleagues played their last trump card. They allegedly asked the brokers at Value Partners to state -- untruthfully -- that they had developed the deal themselves and offered it to KWL, that they had also familiarized KWL with all the risks involved and that only then had Value Partners approached UBS with Heininger's mandate.

On June 8, 2006, one of the Value Partners brokers signed this bogus statement, which was sufficient to set aside the UBS auditors' objections. UBS was now no longer responsible for the risky deal, at least on paper. The deal was perfect a few minutes later, and the first of four CDO transactions with KWL was signed in London.

Simon's bosses were pleased. "It is this type of collaborative effort that we in the IB want to see… On behalf of the management here, we thank you," a senior UBS investment banker wrote to Simon a day later. Another bank manager was already thinking about further projects. "Please let us stay connected to Value partners and involved with future transactions. Nice work," he wrote.

The deal had also been worthwhile for Simon's contacts at Value Partners and Heininger. Two weeks after it was signed, UBS transferred $21.1 million to an American trust account for KWL. Value Partners had power of attorney for the account. On the same day, its advisors transferred $3.2 million to an offshore company in the Caribbean, which then forwarded the funds to Heininger's private account with a bank in Liechtenstein.

Safari Celebration

A few months later, the winners in the deal met to celebrate on the Cape of Good Hope in South Africa. Value Partners had invited the UBS bankers to a safari and a wine-tasting event. Simon and Valota posed for pictures with the hosts. The photos depict the men, smiling and looking triumphant, drinking toasts with red wine and waving around rifles like big game hunters in the savannah.

Heininger wasn't there. He had already served his purpose, since the deal with Leipzig was intended to open the door to a new global market. Value Partners already had its sights set on potential UBS clients, including municipal and government companies in Austria, Hong Kong and Singapore.

But then the financial crisis erupted, and the CDOs proved to be a high-risk product that caused substantial losses for cities and their enterprises.

It was already late in the game when Leipzig Mayor Jung realized what a time bomb his city was sitting on. The deal had been carefully concealed. The funds were transferred through the US State of Delaware, a corporate tax haven, while the transactions were posted to accounts in London, to which there was no reference whatsoever in the Leipzig accounts. Only when the losses incurred by the secret London accounts were uncovered was the extent of the problem exposed. In December 2009 UBS, for the first time, presented the city of Leipzig with a bill for €20 million.

Now the city's auditors discovered that Heininger's deal had created uncontainable risks for Leipzig. As it turned out, the securities were no real insurance for cross-border leasing agreements. The banks had allegedly fabricated this explanation, probably because they believed that anyone who could be talked into a risky deal without understanding it could be fooled a second time.

As it turned out, the CDO products held by KWL were nothing but a melting pot for toxic financial securities. As the collapse of the US real estate market approached, UBS began adding more high-risk candidates to the mix. The list reads like a who's who of crash candidates. It begins with Lehman Brothers and the US mortgage bank Freddie Mac, followed by Iceland's Kaupthing Bank, the US bank Washington Mutual and, finally, in the fall of 2007, US mortgage lender Fannie Mae. They were all bankrupt a year later. By 2010, 13 securities were completely worthless; UBS added eight of those to the Leipzig portfolio after it had signed the contract to buy the CDOs.

Leipzig's mayor has come up with a fitting analogy. "Imagine the following," he says. "To pay the mortgage insurance for your single-family home, you assume the credit insurance for a skyscraper in an earthquake zone."

Heininger and his advisors at Value Partners were arrested on corruption charges in the spring of 2010.

Simon in faraway New York became nervous. In March 2010, he wrote to an acquaintance: "Enter 'UBS and Value Partners' into your web browser. Something will come up in German, but then just click on 'translate' next to the articles. The transaction that I worked on with former friends/colleagues more or less turned into Germany's Bernie Madoff scandal."

Bernard Madoff had defrauded New York investors out of $65 million and was sentenced to life in prison in 2009. It was very disconcerting to him, Simon wrote, that "the original idea came from me."

A Conviction over a $3 Million Bribe

An email written by one of Simon's associates two months later could well pose far more of a problem for UBS. The associate, a financial advisor, had informed Simon that a Value Partners employee was still in custody, because he was considered a flight risk, and had allegedly confessed to having distributed fees and "bribed Heininger with about $3 million." He found it hard to believe, he added, "that UBS was blind to where these amounts were going."

The German judiciary had little interest in the global aspects behind what appeared to be a local corruption scandal. For the judges in Saxony, the confessions by Heininger and his advisors meant that the matter was closed. On Jan. 19, 2011, the Leipzig regional court sentenced Heininger to four years and 11 months in prison for accepting bribes, and the other advisors to three years in prison for bribery. UBS had managed to avoid prosecution once again.

That is now likely to change. The SEC began investigating UBS for its involvement in the Leipzig CDO deal in 2011. Feller and two other SEC investigators examined many emails and draft agreements and interviewed witnesses in New York, London and Berlin.

The SEC has no official comment on the allegations, and UBS and KWL, citing the pending case, also have no comment. UBS bankers Simon and Valota, who were involved in the Leipzig deal at the time, did not respond to inquiries, while their former boss let it be known, through his current employer's spokesman, that he had "no comment."

UBS is already reducing the relative importance of its investment banking operation and slashing jobs. The Leipzig team has been eliminated. Simon now works for a law firm in Cincinnati, Ohio, as head of the firm's structured lending department. Valota and his former bosses have also found new jobs in the financial sector.

Meanwhile, Heininger is in court again, together the Value Partners advisors. A regional court in Dresden has been hearing the case for almost a year, but this time it is not only corruption that is at issue, but also the exorbitant financial loss to the city of Leipzig.

UBS plays only a marginal role in the case, and German financial regulators have not even addressed the Leipzig transactions.

Laszlo Csatary, 98, was head of internment camp for 12,000 Jews during second world war, Budapest prosecutors allege

Associated Pressguardian.co.uk, Tuesday 18 June 2013 18.07 BST

Hungarian prosecutors have indicted a 98-year-old former police officer for abusing Jews and assisting in their deportation to Nazi death camps during the second world war.

They say Laszlo Csatary was the chief of an internment camp for 12,000 Jews at a brick factory in Kosice – a Slovak city then part of Hungary – in May 1944, and that he beat them with his bare hands and a dog whip.

He also allegedly refused to allow ventilation holes to be cut into the walls of a railway carriage crammed with 80 people being deported.

With his actions, Csatary "wilfully assisted in the unlawful execution and torture of the Jews deported from [Kosice] to concentration camps in territories occupied by the Germans," the prosecution said in a statement.

Csatary, who has denied the charges, was first detained by the Hungarian authorities in July 2012 after his case was made public by the Simon Wiesenthal Centre, a Jewish organisation active in bringing Nazis to justice.

Bettina Bagoly, a spokeswoman for Budapest prosecutors, said that since Csatary had been charged with war crimes the case was considered to be of special importance, and the first session of the trial would have to be held within three months.

Bagoly also said the prosecution had asked the court to tighten the conditions of Csatary's house arrest, which were loosened by a judge in April.

Csatary lived for decades in Canada, where he worked as an art dealer before leaving in 1997, just before he was due to appear at a deportation hearing. His Canadian citizenship was later revoked.

Edita Salamonova, a Holocaust survivor whose family was killed at Auschwitz after their deportation from Kosice, said she remembered Csatary well.

"I can see him in front of me," Salamonova said in Kosice last year: "a tall, handsome man but with a heart of stone."

Salamonova remembered Csatary's presence at the brick factory – which has since been torn down. She said she was sure to keep out of his sight when he was around. "One had to hide. You never knew what could have happened any time," said Salamonova, who eventually returned home after enduring several Nazi camps.

Sandor Kepiro, another Hungarian suspect tried for war crimes after the Wiesenthal Centre disclosed his whereabouts, died in September 2011, a few months after being acquitted owing to insufficient evidence. The verdict was being appealed against when he died.

Though Csatary is expected to go on trial in Hungary, he could be extradited to Slovakia, where he was convicted in his absence in 1948.

Pirate Bay co-founder can be extradited from Sweden to Denmark, court rules

Gottfrid Svartholm Warg is accused of involvement in one of Denmark's biggest hacking attacks

Haroon Siddique guardian.co.uk, Tuesday 18 June 2013 16.29 BST

The Swedish co-founder of the Pirate Bay file-sharing website can be extradited to Denmark to face hacking charges, a Swedish court has ruled.

Gottfrid Svartholm Warg is accused of involvement in one of Denmark's biggest hacking attacks – on databases holding driving licence records, official email messages and millions of social security numbers. The attacks on the databases, all run by a Danish subsidiary of the US technology company CSC, took place between April and August last year. A 20-year-old Danish man, alleged to be Warg's accomplice, is being held in custody in Denmark, having pleaded not guilty.

The decision by the Nacka district court comes as Warg, 28, who remains in custody in Sweden, awaits the verdict expected this week in a trial in Sweden in which he was accused of hacking into the IT systems of the Logica services company and stealing ID details of 9,000 Swedes. He allegedly attempted to transfer 5.7m Swedish kronor (£560,000) to various accounts.

He can appeal against the extradition decision, which will also be dependent on the verdict and any sentence in the Logica trial.

Warg and the other three Pirate Bay co-founders were found guilty in 2009 of assisting the distribution of illegal content online. They were all handed jail terms and a collective fine of $2m (£1.3m), increased at their appeal to $6.5m. Warg left the country before serving his sentence but was deported from Cambodia last year.

His case falls under a Nordic arrest warrant, which means there is no legal review of evidence in the case.

That distinguishes it from the case of the WikiLeaks founder Julian Assange, who has justified sheltering in the Ecuadorean embassy in London for a year to avoid extradition to Sweden to face sex assault and rape accusations, which he denies, by arguing that he would face onward extradition to the US to face potential charges relating to the WikiLeaks releases.

Josef Stalin famously uttered the demonically cynical maxim that "the death of one man is a tragedy, the death of millions is a statistic". In other words, he believed that when faced with the choice of focusing on horrors small and tangible or vast and incomprehensible, humanity goes small. It is the political spawn of Stalin's feared security apparatus, Vladimir Putin, who is proving that this applies to scandals in the world of sport. One small theft is the sports story of the moment in the United States, while a heist of epic proportions, is emitting nary a peep.

The sports press is agog with the revelation by New England Patriots owner Robert Kraft that in 2005, Putin stole his Super Bowl ring. At the time, Putin's sticky fingers were caught on camera and the scene generated some laughs. There was the leader of Russia trying it on at a press event and then walking out of the room, as a bovine, slack-jawed Kraft looked on. The Patriots organization played it off as an intentional gift. But Kraft revealed this week that it was more of a mugging with the parodically alpha-male Putin icily looking at Kraft and saying, "I can kill someone with this ring," then in Kraft's words, "I put my hand out and he put it in his pocket, and three KGB guys got around him and walked out."

It's a pulpy, punchy story and it's understandable why sports reporters are flocking to it like a seagull to carrion. It also fits a narrative that has served Vladimir Putin well. He's the Tony Soprano of world leaders: the man who gets what he wants and wants what he gets.

But Putin – not unlike the decaying Mafia itself – isn't nearly as ruthlessly efficient as his legend suggests. For evidence of this, we don't even have to leave the world of sports. I'm referring to the billions in disappeared "spending" for the 2014 Winter Olympics, to be held – for reasons that boggle the mind – in the humid, subtropical Russian resort city of Sochi.

Putin has staked his reputation on the smooth hosting of the winter games. Based on the planning, it either speaks to how little he values his reputation, or more likely, that beneath the steely glare and martial arts muscles, he's being exposed as little more than a thuggish front man for a kleptocracy.

According to a detailed report issued by Russian opposition leaders in May, businessmen and various consiglieres of Putin have stolen up to $30bn from funds intended for Olympic preparations. This has pushed the cost of the winter games, historically far less expensive than their summer counterpart to over $50bn, more than four times the original estimate. That $50bn price tag would make them the most expensive games in history, more costly than the previous twenty-one winter games combined. It's a price tag higher than even than the 2008 pre-global recession summer spectacle in Beijing.

As Andrew Jennings, author of Lords of the Rings and the most important Olympic investigative reporter we have, said to me, "The games have always been a money-spinner for the cheerleaders in the shadows. Beijing remains impenetrable but is likely to have been little less corrupt than Putin's mafia state."

"Mafia state" may sound extreme, but these winter games will go down in history as perhaps the most audacious act of embezzlement in human history. As Russian opposition leader Boris Nemtsov and Leonid Martynyuk wrote, "Only oligarchs and companies close to Putin got rich. The absence of fair competition, cronyism … have led to a sharp increase in the costs and to the poor quality of the work to prepare for the Games … The fact is that almost everything that is related to the cost problems and abuses in preparation for the Olympic Games was carefully concealed and continues to be covered up by the authorities."

One of those officials was Akhmed Bilalov, who was forced to flee Russia, fearing for his life, after Putin blamed him for the ballooning costs. Now Bilalov has gone public with news that he is undergoing medical treatment for being poisoned, allegedly by agents of the Russian state.

Even more nauseating, if not surprising, than the alleged theft/attempted murder is the shrug of the shoulders from the International Olympic Committee. Jean-Claude Killy, the French skiing superstar from the 1970s, is now in charge of the International Olympic Committee's coordination commission for the Sochi games.

"I don't recall an Olympics without corruption," Killy said. "It's not an excuse, obviously, and I'm very sorry about it, but there might be corruption in this country, there was corruption before. I hope we find ways around that."

If $30bn is too much of an incomprehensible "statistic" to get our heads around, even in a country with poverty and hunger rates that spiked dramatically in the wake of the 2008 global economic crisis, consider the people who actually have to live in Sochi. Thousands of families have been forcibly displaced by construction projects that will have no use once the cameras have cleared. The local environment has strip-mined and polluted the ecosystem. According to Human Rights Watch, one village, Akhshtyr, which has 49 homes and a population of 102 people, has been without water for a year because of Olympic construction without end. Sochi is basically being treated like Henry Hill's bar in Goodfellas: to be discarded by the Russian state once the Olympics are over and it has nothing left to give.

The 2014 Winter Games are nothing any sports fan with a conscience should support. Putin should be protested at every turn for allowing his cronies to loot his country and immiserate the people of Sochi. If there is any justice, these games will mark the beginning of his end, as the veil is lifted and the cost of his rule is revealed in stark relief for all to see. Putin's got to go. If it makes it easier, he can keep the damn ring.

State-owned radio and TV network will keep broadcasting during restructure after shutdown by prime minister sparked crisis

Reuters in Athensguardian.co.uk, Tuesday 18 June 2013 04.56 BST

A Greek court has ordered the state broadcaster ERT back on air while it is restructured, allowing squabbling leaders of the governing coalition to move towards a compromise that avoids early elections.

The ruling came six days after the prime minister, Antonis Samaras, suddenly switched ERT off to save money and please foreign lenders, sparking an outcry from unions, journalists and exposing a rift with his allies.

The top administrative court appeared to vindicate Samaras's stance that a leaner, cheaper public broadcaster must be set up but also allowed for ERT's immediate reopening as his two coalition partners had demanded, offering all three a way out of an impasse that had raised the spectre of a snap election.

All parties claimed victory from the ruling, which failed to specify whether ERT must restart with programming as before or only partially resume operations until its relaunch.

"The court decision is essentially in line with what we've said: no one has the right to shut down national radio and television and turn screens black," said Fotis Kouvelis, head of the small Democratic Left party in the coalition.

Evangelos Venizelos, head of the Socialist Pasok party, said the ruling vindicated his party's line and reiterated that he was against going to early elections.

An official from Samaras's New Democracy party – which has already scored a minor victory by securing the latest tranche of bailout funds partly due to ERT's shutdown – said the ruling affirmed the government's position that ERT had to be scrapped. "ERT is shut, ERT is finished," said the official.

A live feed of ERT – whose journalists have continued broadcasting over the internet in defiance of orders – showed workers breaking into applause after the court ruling. ERT's symphony orchestra began a concert outside its headquarters, playing an old news jingle to cheering supporters. "I've been here seven nights and this is the first time I've seen people smile," said Eleni Hrona, an ERT reporter.

During talks with his allies Samaras offered to reopen a pared-down version of ERT under temporary management, reshuffle the cabinet and update the coalition's agreement to improve co-operation among parties, a government official said.

Pasok's Venizelos said Samaras had appeared to accept the option of a cabinet reshuffle and better co-ordination. The three political leaders would meet again on Wednesday to agree on how to implement the court ruling.

"ERT is not the only or the main issue," he said. "The main issue is that this government must operate as a government of real co-operation and not as a one-party government."

The threat of early elections that had shaken financial markets appeared to recede as talk shifted to the reshuffle. "No political leader said we must go to elections," another official said. "Elections weren't even discussed."

The coalition parties over the past week had fed fears of a hugely disruptive snap poll by refusing to compromise over an entity widely unloved until its shock overnight closure.

Aware his allies stand to lose heavily in any election, the conservative Samaras had refused to turn the "sinful" ERT back on, vowing to fight to modernise a country he says had become a "Jurassic Park" of inefficiency and corruption.

His coalition partners had previously rejected Samaras's offer of a limited restart of broadcasts.Ratings agency Moody's said the fraying political consensus on ERT's closure and slippage on a troubled privatisation programme after Athens failed to sell off state natural gas firm DEPA were negative for Greece's lowly C credit rating. "Without a compromise among coalition partners, the risk of new elections will increase," the agency said.

A senior eurozone official voiced concern that Greece was hurtling back to its days of crisis and drama, given the slow pace of public sector reforms and privatisations. "It's kind of deja vu with Greece," the official said.

Opinion polls over the weekend showed a majority of Greeks opposed the shutdown, due rather to its abruptness – screens went black a few hours after the announcement, cutting off newscasters mid-sentence – than to the decision itself.

In Syntagma Square outside parliament thousands gathered to listen to radical left opposition leader Alexis Tsipras protest against the ERT shutdown and attack Samaras as a "great Napoleon of bailouts".

"But he didn't see, nor did he predict, the Waterloo that ERT workers and the great majority of people prepared for him," Tsipras told crowds of flag-waving supporters.

Journalist says he was asked by unnamed intermediary to notify Icelandic government that Snowden may want to seek asylum

Reuters in Reykjavikguardian.co.uk, Tuesday 18 June 2013 18.37 BST

Iceland has received an informal approach from an intermediary who claims Edward Snowden, the former National Security Agency contractor who exposed the US government's secret surveillance programs, wants to seek asylum there.

Snowden, the former employee of contractor Booz Allen Hamilton, who worked in an NSA facility in Hawaii, made world headlines after providing details of the program to the Guardian and Washington Post and then fleeing to Hong Kong.

In a column in the Icelandic daily Frettabladid, WikiLeaks spokesman Kristinn Hrafnsson claimed that a middleman had approached him on behalf of Snowden.

"On 12 June, I received a message from Edward Snowden where he asked me to notify the Icelandic government that he wanted to seek asylum in Iceland," Hrafnsson, who is also an investigative journalist in Iceland, told Reuters.

The Icelandic government, which has refused to say whether it would grant asylum to Snowden, confirmed it had received the message from Hrafnsson.

"Kristinn Hrafnsson has contacted two ministries in an informal way but not the ministers. There has been no formal approach in this matter," a government spokesman said.

Hrafnsson declined to name the go-between to Reuters.

Snowden has mentioned Iceland as a possible refuge. Iceland has a reputation for promoting internet freedoms, but Snowden has said he did not travel there immediately from the United States as he feared Iceland could be pressured by Washington.

"Iceland could be pushed harder, quicker, before the public could have a chance to make their feelings known, and I would not put that past the current US administration," Snowden said in an online forum in the Guardian on Monday.

WikiLeaks founder Julian Assange, holed up in the Ecuadorean embassy in London to avoid extradition to Sweden for questioning over allegations of sex crimes, visited Iceland several times in the run-up to some of the website's major releases. Assange denies any wrongdoing.

WikiLeaks won a ruling this year in Iceland's supreme court against MasterCard's local partner. The court upheld a lower court's ruling that the payment card firm had illegally ended its contract with the website. Wikileaks' funding had been squeezed without the ability to accept card payments.

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NSA surveillance: what Germany could teach the US

Data protection is to the communication age is what environmental protection was for the age of industrialisation. We must not leave it too late to act

Juli Zeh The Guardian, Tuesday 18 June 2013

At the end of the G8 meeting in Northern Ireland on Tuesday night, Barack Obama and Angela Merkel will hop on a plane bound for Berlin together. Merkel has already boasted that she will make their meeting an awkward one, promising to ask uncomfortable questions about the Prism affair. The image that comes to my mind is that of a pinscher yapping at a great dane, while the great dane just benignly gazes into the distance.

Of course, the pinscher has every reason to bark its lungs out. Surveillance of worldwide internet communications, as practised by the National Security Agency (NSA) through Prism, is the stuff of Orwellian nightmares. Any democratic system rests on the idea that its citizens can think and act freely – but no individual can act and think freely while being watched. The very fact of being watched means that we act differently. Unsupervised communication between individuals is an essential precondition for a functioning democracy.

There will always be people who dismiss complaints about state surveillance as hysteria. Since 11 September 2001 it has become increasingly easy to discourage those who care about their fundamental rights. Just insist that a new measure will aid the fight against terrorism, and that legitimises it. Particularly in Britain and the US, many people seem surprisingly blase about the idea of the state watching over them.

I despair at such indifference. Germany endured two totalitarian systems in the 20th century. Not just Nazism, but the GDR too, built a dictatorship on the surveillance, registration and selection of individuals. People became objects who were divided into nebulous categories. The fight against terror requires a similar division of civil society according to sex, age, ethnicity, religion and politics. The problem with such machine-led screening methods is not only that it is very hard for people to escape them once they get caught, but that they no longer presume innocence – everyone is now a potential suspect.

Because of this, Germans have traditionally been more sensitive to assaults on their private sphere. There are fewer CCTV cameras, and Google's Street View project was met with widespread resistance in 2010: click yourself through a map of Germany and you'll still find large areas still pixelated. A few weeks ago, Germany published its first post-reunification census – the previous ones in the 1980s were widely boycotted on ethical grounds. But that Germany hasn't reached the level of the US is not thanks to politicians' sense of history, but to the so-called "basic law" that anchors our constitution and the federal constitutional court that protects it. One "security law" after the next has been proposed and then rejected by the court for infringing on civil rights.

But being a little more sensible on civil rights issues than other European states will no longer do. On the contrary: with its unique historical background, Germany should be leading the charge against any form of Big Brother system.

Having been raised in East Germany, Merkel especially should know what is at stake here. She experienced in her youth how long-term surveillance can demoralise the human spirit and distort the character of a society.Explaining that to her American counterpart would be a start for Merkel. She should explain to him that there is a lesson for the rest of the world in Germany's history. In the 21st century, modern technology will take the possibility for total surveillance to a completely new level. Compared with what Prism allows you to do, Stasi activities look like child's play: the size and speed of the data flow threatens to overwhelm the lawmakers who are meant to control it.

My fear is that Merkel's protest will be hard to take seriously, and that Obama will notice this. Since 9/11, Merkel's government has also passed laws that allow the state to virtually x-ray its citizens. Der Spiegel recently reported that Germany's equivalent of the NSA, the BND, is planning to expand its web monitoring programme over the next five years.

Ultimately, Merkel's emphatic concern about the Prism affair stems from the fact there will a federal election in Germany in September. It's a convenient chance to demonstrate a bit of political spine. Once the pinscher's done with the yapping, the great dane will give her a kindly smile and assure her that everything is happening within the law. After that, the excitement about Prism will soon evaporate, and they in America and we in Europe will continue collecting data.

Data protection is to the communication age what environmental protection was for the age of industrialisation. Back then, we lost decades because we didn't realise how severe the damage we were causing really was. Let's try not to make the same mistake twice.

• This article was amended on Tuesday 18 June. Angela Merkel was born in Hamburg, not East Germany, as the seventh paragraph originally stated. She was raised in East Germany.

Some of the most senior intelligence and law enforcement officials in the United States strongly defended the National Security Agency's broad surveillance efforts on Tuesday, saying they had disrupted more than 50 terrorist plots around the world.

General Keith Alexander, the director of the NSA, told a rare public hearing of the House intelligence committee in Washington that the programs were "critical" to the ability of the intelligence community to protect the US.

Offering the most extensive defence yet on the efficacy of secret surveillance programs reported by the Guardian and the Washington Post, Alexander said they were "limited, focused and subject to rigorous oversight".

During the hearing, members of Congress criticised the source of the leaks, Edward Snowden, who remains free in Hong Kong. On Tuesday, Iceland said it had received an informal approach from an intermediary claiming that Snowden, a 29-year-old former NSA contractor, wanted to seek asylum there. Asked at the congressional hearing about what was next for Snowden, Alexander said: "justice".

Flanked by senior officials from the FBI, Justice Department and the Office of the Director of National Intelligence, Alexander said that two surveillance programs revealed by the Guardian and the Washington Post had "helped prevent more than 50" terrorist attacks in over 20 countries.

Most of those prevention efforts, Alexander said, came from the NSA's monitoring of foreigners' internet communications under a program known as Prism. He conceded that only 10 related to domestic terror plots.

The Obama administration officials gave more details about four cases in which information taken from the NSA's databases of foreign internet communications and millions of Americans' phone records had contributed to stopping attacks. Two of them have been previously disclosed, especially that of the 2009 arrest of would-be New York subway bomber Najibullah Zazi. That case has been sharply challenged thanks to court records as more attributable to traditional police surveillance.

Referring to the statutory authority for Prism, known as Section 702 of the 2008 Fisa Amendments Act, FBI deputy director Sean Joyce said: "Without the 702 tool, we would not have identified Najibullah Zazi."

Joyce identified two previously unknown cases that he said the surveillance efforts helped unravel. In one, a Kansas City, Missouri, man named Khalid Ouazzani was found communicating with a "known extremist" in Yemen, information that helped detect what Joyce called "nascent plotting" to bomb the New York Stock Exchange. The other, described more vaguely, allowed the US government, using the NSA's phone-records database of Americans, to revisit a case closed shortly after 9/11 for lack of evidence.

Ouazzani, however, was never convicted of plotting to bomb the stock exchange. Andrew Ames, a Justice Department spokesman, later clarified that he was convicted of "sending funds" to al-Qaida. The other case, Joyce said, involved an American who provided "financial support" to extremists in Somalia.

Two members of the Senate intelligence committee, Ron Wyden and Mark Udall, said last week that they had not seen any evidence to show that the "NSA's dragnet collection of Americans' phone records has produced any uniquely valuable intelligence".

The intelligence and law enforcement officials as subject to "checks and balances". But they clarified, in the most detail provided publicly thus far, that most of those checks are internal.

James Cole, the deputy attorney general, said that the NSA needs "reasonable, articulable suspicion" of involvement in terrorism before searching the millions of Americans' phone records that it collects. But, Cole said: "We do not have to get separate court approval for each query."

Instead, the NSA sends an "aggregate number" of times it has searched the database every 30 days to the secret Fisa court that oversees surveillance, while also sending a separate report each time NSA analysts inappropriately search the database. Alexander's deputy, Chris Ingliss, said NSA analysts searched the database 300 times in 2012 in total.

Representative Adam Schiff, Democrat of California, said that "it may be valuable to have court review prospectively".

Alexander pledged to send the House and Senate intelligence committees greater detail on the surveillance programmes' role in preventing the 50-plus plots in secret on Wednesday. But he insisted the NSA took great care internally to balance civil liberties and national security.

"I would much rather today be here to debate this point than try to explain why we failed to prevent another 9/11," he said.

Afghanistan's president, Hamid Karzai, has suspended talks on a long-term security deal to keep US troops in his country after Nato leaves in 2014, accusing Washington of duplicity in its efforts to start peace talks with the Taliban.

The announcement came the day after the Taliban opened a "political office" in Qatar, saying they wanted to seek a peaceful solution to the war in Afghanistan, and the US announced plans for talks with the insurgent group.

News that American diplomats would sit down with Taliban leaders for the first time since the US helped oust the group from power in 2001 prompted speculation that real progress towards a negotiated end to the war might be in sight.

US officials underlined that they aimed mostly to facilitate talks between Afghans, although they do have issues to tackle directly with the Taliban, including a possible prisoner exchange.

But while the Taliban hinted at meeting US demands of a break with al-Qaida – saying Afghan soil should not be used to harm other countries – there was only the barest of nods to the Afghan government's request that they talk to the current administration and respect the constitution.

Diplomats say Karzai was kept in the loop about plans for the formal opening of a Taliban office in Qatar, but had expected it to be couched differently. After hours of ominous silence, his office issued a terse statement in effect condemning the move.

"In view of the contradiction between acts and the statements made by the United States of America in regard to the peace process, the Afghan government suspended the negotiations, currently under way in Kabul between Afghan and US delegations on the bilateral security agreement," the palace said.

The final straw for Karzai was their display of a white Taliban flag and repeated use of the name "Islamic Emirate of Afghanistan", both in their statement and on a printed backdrop used for a televised press conference, according a senior Afghan official.

It was the name the group used when they ruled from Kabul, and together with their official flag gave the group's representatives the air of a government-in-exile as they addressed the media.

The US had pledged the Taliban would only be able to use the office as base for talks, not as a political platform, and Karzai felt the press conference was a clear violation of that promise, an official Afghan source told the Guardian.

The president was also unhappy about the lack of any reference to the country's constitution, which both he and the US say the Taliban must respect.

Instead the statement made more than one reference to the "establishment of an independent Islamic government"; as the group have often denounced Karzai as a puppet, that could be read as a call for a change of leader or change of system.

The decision to suspend talks was made after a meeting on Wednesday morning with his national security team and close aides, a source said.

The Afghan government's anger is a blow to hopes that the country's warring factions could be taking the first real steps towards peace; despite US cash and military might, 12 years of fighting have shown it cannot secure the country alone.

In another reminder of the fragile situation in Afghanistan, the Taliban claimed responsibility on Wednesday for an attack on Bagram air base that killed four American troops.

A Taliban spokesman said insurgents had fired two rockets into the base outside the Afghan capital, Kabul, late on Tuesday. US officials confirmed the base had come under attack by mortar or rocket and four troops had been killed.

Karzai has long been a strong advocate of peace talks and cautiously welcomed the idea of a base in Doha, while pushing hard for any negotiations to move to Afghanistan as fast as possible.

But he has also drawn clear red lines, one of them being that the Taliban office first mooted in 2011 should not be used as a base for fundraising or building diplomatic relationships.

A source at the High Peace Council, a body created by Karzai to lead government negotiation efforts, said it was still planning to send a delegation to Qatar, but it was unclear when; and without the support of the Afghan government there is little hope it can make much progress.

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US to join direct peace talks in Qatar with Taliban over Afghanistan's future

'Peace and reconciliation' milestone comes after US drops request for formal rejection of al-Qaida as precondition to talks

The US is to open direct talks with Taliban leaders within days, it was revealed on Tuesday, after Washington agreed to drop a series of preconditions that have previously held back negotiations over the future of Afghanistan.

In a major milestone in the 12-year-old war, political representatives of the Taliban will shortly meet Afghan and US officials in Doha, the capital of Qatar, to discuss an agenda for what US officials called "peace and reconciliation" before further talks take place with Afghan government representatives soon after.

The move came on the day that Nato forces handed official control of nationwide security to Afghan troops. Less than 12 hours later the US confirmed that four US personnel died at Bagram air base near Kabul, in what was thought to be a mortar attack. The Taliban claimed responsibility.

Earlier the Taliban, in a statement announcing their plans for peace talks and an office in Qatar, said they would not allow anyone to threaten or harm other countries from Afghan soil – a move senior US administration officials described as an important first step to the Taliban severing ties with al-Qaida.

The US has agreed that a formal rejection of al-Qaida by the Taliban leadership would now be a "negotiating aim" rather than a precondition for talks. It will also seek a commitment from the Taliban to end its insurgency in Afghanistan and recognise women's rights in the country.

"This is an important first step but it will be a long road," said one senior US official. "We have long said this conflict won't be won on the battlefield, which is why we support the opening of this [Doha] office."

White House officials say they believe the Taliban delegation at the talks represents the movement's leadership, and includes more radical groups such as the Haqqani network. Officials said the US would have a direct role in the talks starting starting this week in Doha, but the substantive negotiations over the future of Afghanistan would then be led by the Afghan government.

Speaking later, Ben Rhodes, deputy national security adviser, said: "The United States will be supporting a process that is fundamentally Afghan-led … We can play a role in talking to the Taliban as well in supporting that peace process – and because we have issues of our own to bring up with them."

A Taliban spokesman said the group was opening the Doha office to "reach understanding and initiate talks with countries of the world for the purpose of improving relations with them", and to support a peaceful, political solution to end the "occupation of Afghanistan".

The proposal for a Doha office has been on the table since 2011, and several senior Taliban figures have been living in Qatar for many months now, but the group had not publicly embraced plans for peace talks.

In Kabul, Afghan president Hamid Karzai said he hoped the opening of the Taliban office would bring the start of talks between the High Peace Council he set up to lead government negotiation efforts, and the insurgents.

However the Afghan leader, who has long been lukewarm about efforts to set up a Taliban base in Qatar, also called for any negotiations to move back to Afghanistan as soon as possible. "We hope that our brothers the Taliban also understand that the process will move to our country soon," he told a news conference in Kabul, although US officials stressed that moving talks to Afghanistan would take time.

Karzai also announced that Nato forces had handed official control of nationwide security to Afghan troops on Tuesday. Foreign soldiers will still be fighting on the ground and supporting Afghans with air power, medical evacuation and other key capacities until the end of next year.

Barack Obama is understood to have informed G8 leaders of the breakthrough at a dinner at the Northern Ireland summit on Monday night.

The deal on talks with the Taliban was partly brokered by Pakistan and the emir of Qatar after "months of diplomatic spadework" also involving Germany, Norway and the UK. In 2011, Hillary Clinton suggested that Taliban leaders would have to renounce violence for a peace process to work.

"Over the past two years, we have laid out our unambiguous red lines for reconciliation with the insurgents: they must renounce violence; they must abandon their alliance with al-Qaida; and they must abide by the constitution of Afghanistan," she said. "Those are necessary outcomes of any negotiation. This is the price for reaching a political resolution and bringing an end to the military actions that are targeting their leadership and decimating their ranks."

But on Tuesday, that position appeared to have soften somewhat. "We don't expect them to break ties with al-Qaida [immediately]," said one of the US officials speaking on an off-the-record conference call. "That is an outcome of the process." He said the expected Taliban statement opposing the use of Afghan soil for foreign attacks was "a first step in distancing them from international terrorism".

The Taliban also appeared to have softened on their long-term demand that foreign troops leave before talks can start. Karzai, despite his misgivings about overseas talks and initial opposition to the Qatar office visited the Gulf state twice this year, apparently paving the way for Tuesday's breakthrough.

Afghan president Hamid Karzai, who has always said he would prefer talks to take place in Afghanistan, was initially lukewarm about the Qatar plans, but has visited the state twice this year, apparently paving the way for today's breakthrough.

North Korean ruler Kim Jong-Un has reportedly given copies of Adolf Hitler’s “Mein Kampf” to his top officials, urging them to study it as a leadership skills manual.

Kim handed out translations of the German dictator’s manifesto to select officials at the time of his birthday in January, reported New Focus International, an online news portal run by North Korean defectors.

The report, sourced to an unnamed North Korean official working in China, was picked up by all major South Korean newspapers on Wednesday.

“Mentioning that Hitler managed to rebuild Germany in a short time following its defeat in World War I, Kim Jong-Un issued an order for the Third Reich to be studied in depth and asked that practical applications be drawn from it,” the source was quoted as saying.

Kim also stressed that sports had played a key role in cementing unity and spreading Nazi ideology in Germany, and called for policies to encourage sporting activities among North Koreans, the source said.

“Mein Kampf” (“My Struggle”), written in 1924 while Hitler was languishing in a Bavarian prison before becoming a German leader, is both a vicious anti-Semitic tract and rambling memoir.

A North Korean businessman told New Focus International of persistent rumours within the Pyongyang elite that Kim had made a close study of Hitler during his time at an international school in Switzerland.

The Kim family dynasty has ruled North Korea with an iron fist for more than six decades.

Kim Jong-Un took over the isolated communist state after the death of his father Kim Jong-Il, in December 2011.

North Korea has angrily denied a report that its ruler used Adolf Hitler’s memoir as a leadership guide, threatening to kill the authors of the report.

The article by New Focus International, an online news portal run by North Korean defectors, said Kim Jong-Un had given copies of “Mein Kampf” to his top officials, urging them to study it as a leadership skills manual.

He handed out translations of the German dictator’s manifesto to select officials at the time of his birthday in January, it said, citing an unnamed North Korean official working in China.

“Mentioning that Hitler managed to rebuild Germany in a short time following its defeat in World War I, Kim Jong-Un issued an order for the Third Reich to be studied in depth and asked that practical applications be drawn from it,” the source was quoted as saying.

The story was picked up by all major South Korean newspapers on Wednesday.

But the North’s police agency later Wednesday called the report a “thrice-cursed crime” aimed at belittling its leader and threatened to kill the “human scum” behind the article.

“We are… determined to take substantial measures to physically remove despicable human scum who are committing treasons,” it said in a statement carried by the state-run Korean Central News Agency.

“Sordid human scum will never be able to look up to the sky nor be able to find an inch of land to be buried after their death,” it said.

It also vowed to launch “merciless punishment of justice” against Seoul and Washington, accusing the two nations of encouraging the defectors to defame its ruler.

“Mein Kampf” (“My Struggle”), written in 1924 while Hitler was languishing in a Bavarian prison before becoming a German leader, is both a vicious anti-Semitic tract and rambling memoir.

The Kim family dynasty has ruled North Korea with an iron fist and pervasive personality cult for more than six decades.

Kim Jong-Un took over the isolated communist state after the death of his father Kim Jong-Il, in December 2011.

Tibetans required to register for internet and mobile phones under real names

Reuters in Beijingguardian.co.uk, Wednesday 19 June 2013 12.24 BST

China has completed a monitoring scheme in restive Tibet that requires all telephone and internet users to register under their real names, state media said on Wednesday, as part of a campaign to crack down on what officials describe as rumours.

Tibetans are already closely watched, due to decades of often violent unrest in protest at Chinese rule, which Beijing blames on exiled spiritual leader the Dalai Lama.

By the end of last year, all 2.76 million fixed line and mobile telephone users and 1.47 million internet users in the remote region had registered for services under their real identities, Xinhua news agency said.

The scheme "is conducive to protecting citizens' personal information and curbing the spread of detrimental information" the report quoted government official Nyima Doje as saying.

The growing popularity of the internet and mobile phones has "brought about social problems, including the rampant circulation of online rumours, pornography and spam messages", another official, Dai Jianguo, said.

"The real-name registration will help resolve these problems while benefiting the long-term, sound development of the internet," Dai added, according to Xinhua.

The central Chinese government last year passed a law mandating the use of real names to register for internet services and also began forcing users of Sina Corp's wildly successful Weibo microblogging platform to register their real names.

Enforcement of similar rules for cellphones, especially pay-as-you-go services, is often lax, though.

The Dalai Lama fled into exile in 1959, following a failed uprising against Chinese rule. He denies Chinese charges of stoking violence in Tibet.

China's announcement of the successful completion of the telephone and internet monitoring programme in Tibet comes as Chinese media and the government have expressed indignation at accusations of mass surveillance by the US.

The explosive revelations of the US National Security Agency's (NSA) spying programmes were made by Edward Snowden, a former CIA employee and NSA contractor now holed up in Hong Kong, a China-controlled city.

The former British colony is supposed to enjoy wide-ranging autonomy and broad freedoms denied to people in mainland China, including an independent judiciary and free press.

Since its return to Chinese rule in 1997, however, the city's pro-democracy politicians and activists have complained that Beijing has been steadily eroding Hong Kong's freedoms, despite constitutional safeguards.

China demanded on Monday that Washington explain its monitoring programmes to the international community, though China itself routinely monitors its own population.